All member countries of the G20 group of economic powers seem to be buying into the idea of restructuring Ghana’s debt, alongside the Paris Club, a group of officials from major creditor countries, which is taking the forefront in setting up a creditor committee for the aforementioned objective.
This step forward follows Ghana’s request for a debt restructure under a G20 Common Framework, a framework founded to aid low-income countries. Ghana’s petition for the debt restructure under the G20 Common Framework came last week, effectively making it the fourth country after Chad, Ethiopia and Zambia to do so.
This framework was created in 2020, following the global pandemic, and allows a streamlined process of coordinating creditor governments to restructure the debts of low-income countries.
An anonymous official from the Paris Club is quoted as saying, “There is a commitment by the leaders to form the creditor committee, so it’s a question of time. We know that all the G20 members are committed to undertake the debt treatment under the Common Framework.”
The official also noted that the Paris Club hopes to assemble the committee in less than a month, despite previous instances taking a couple of months to establish a committee.
“We think that the process will become smoother and smoother on the basis of the previous cases,” the official said, after noting that Ghana’s debt restructuring seems far less complex than Zambia’s case.
Ghana’s road to recovery, after a year of its worst economic meltdown in 2 decades, has in the past month looked quite promising.
It was recently reported that the country’s producer price index dropped by a whopping 25.9% in December, following the country’s currency revaluation against the dollar in the same month.
Also in the same month, Ghana had introduced a debt swap program which was lauded as intuitive, and shortly after secured a staff-level agreement with the International Monetary Fund for a $3bn relief fund.